Plaintiff filed a putative class action in Arkansas state court against his automobile insurer for alleged failure to pay the full amount it was contractually required to pay for his medical bills following a car accident. Specifically, the defendant insurer allegedly paid a reduced in-network rate comparable to that negotiated by health insurers, which plaintiff argued improperly left him – and a putative class of similarly situated policyholders – to pay the difference between the bills he incurred and the amounts paid by his insurer, despite the fact that the full amount of the bills was less than his automobile insurance policy limit.
After defendant removed the case to federal court under CAFA, plaintiff moved for class certification. In denying the motion for class certification, the Arkansas federal district courtfound the class was not ascertainable because – in many cases – the medical providers might accept the in-network payment as payment in full, leaving no balance due from the insured. As a result, the court would need to conduct individualized inquiries to determine whether each insured for whom the insurer paid a lower in-network rate was harmed by the practice. In so holding, the court expressly rejected plaintiff’s argument that an insured has standing to assert a claim for breach-of-contract even if he has not suffered any actual damages. For similar reasons, the class failed the commonality, typicality, superiority, and predominance tests: individualized inquiry was required to determine whether, after the insurer’s payment of the reduced in-network rate, each policyholder was left with an outstanding balance.
